Semiconductor giant Intel (Intc -0.25 %) It is in the right IN of an existing crisis. The company lacks permanent CEOs, its casting -centered strategies are in the air, the loss of market share emphasizes finance, and the efforts of artificial intelligence (AI) are surprisingly surprising.
Many things are a problem for Intel, but the server CPU business is one of the areas where the company has made a legitimate progress. Rival advanced microdovice (AMD 2.79 %) A few years ago, I made the Intel leap in Genoa Family’s chips and broke the market leader in core count, performance and efficiency. It took a while, but lastel came up with the answer last year using the Granite Rapids Server CPU.
Granite Rapids is an important product for Intel. The chip family ultimately moved from the Intel 7 manufacturing process, which aged the company’s main line server CPU products, to a more advanced Intel 3 process. Intel could increase the maximum core count to 128, double the predecessor core count, and the review showed that Intel had caught up to AMD from the performance perspective.
Surprising price reduction
One of the surprising things about the launch of Granite Rapids was the price setting. Intel has decided to grow, and the price setting of the X86 server CPU flagship model has been set to the highest level so far. Considering that Intel is still catching up, this price setting is a sign that Intel is very confident in granite rapids, or the competitive landscape is greatly different from today. Indicates that the company has not accepted it. before.
Tom’s hardware reported earlier this week that Intel had significantly reduced the listed price of granite Lapids CPU without a formal announcement. The flagship model is currently listed for $ 12,460 and is less than the original release price of $ 5,340. Other models have also been reduced in price, bringing prices below the same alternative to AMD.
In particular, the price reduction has gained prices per core of the finest Granite Lapids Chip, far below AMD’s finest chips, which is an attractive proposal for customers who build a cloud data center dense by GRANITE RAPIDS. I did it.
There are several ways to interpret this price reduction. First, the granite stream may not be sold as much as Intel wanted. The product family looks like a winner, but the price has risen and we have been able to drive away customers. Intel is set to report the results for each quarter on Thursday, so we hope that the company will provide an update.
The second way to interpret this movement is that Intel is taking aggressive measures to regain market share. The company is still a leader in the server CPU market, but AMD has made a great deal in the past few years. AMD’s X86 server unit share was only 6.6 % to 24.2 % in the third quarter of 2024 in the third quarter of 2020.
The truth may be two combinations. Reduction of price can damage Intel margins, but that is not a natural conclusion. Since Intel manufactures Granite Rapids in the company in the Intel 3 process, if price reduction promotes the sales of units and improves the usage rate of company fab, the profit rate may not be hit so much. there is. Intel 3 is a process that Intel provides to Foundry customers and may have excess capacity that the company needs to fill.
Make the AMD slow down
Regardless of price reduction, Intel’s latest server CPU is much more attractive than AMD. AMD is outsourcing to TSMC, so if the company reduces the price accordingly, it will bite into the profit margin.
However, one of the memorable things is that the list price of Intel and AMD server CPU is not actually paid by large customers. Rather, they are the ceiling. Intel may have provided a much larger discount to cloud computing customers.
Anyway, Intel seems to be taking off gloves to return the data center business into shape and regain some of the market share lost in the past few years. The aggressive price setting is necessary for the company to improve things with a solid and competitive product lineup.
Timothy Green has a position in Intel. Motley Fool recommends advanced microdovies, intel, and semiconductor manufacturing in Taiwan. Motley Fool recommends the following options: A $ 27 phone call in Intel in February 2025. Motley fools have a disclosure policy.
